According to Gibbs Giden Attorneys At Law, there has been a new law in California and other states that help protect subs and suppliers on P3 projects. On these projects, the public entity provides a piece of land where a private entity designs, builds, and sometimes operates the finished public project.
In California, public projects exceeding $25,000 require that the prime contractor furnish a surety bond with an amount not less than 100 percent of the total contract. This is to help insure that the project will be completed and that the subs and suppliers can be paid for the labor and other services that have been provided.
On August 13, the governor of California signed a legislation, known as Assembly Bill 164, to help secure payment claims for laborers, mechanics, and material suppliers that have been employed under contracts. This bill authorized local government agencies to use public-private partnerships for the design, finance, and maintenance of fee-producing facilities.